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NASAA Announces Top Investor Threats for 2020

The North American Securities Administrators Association (NASAA) announced the top five products or schemes likely to scam investors in the coming year and recommended steps investors can take to protect themselves from fraud.

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The North American Securities Administrators Association (NASAA) announced the top five products or schemes likely to scam investors in the coming year and recommended steps investors can take to protect themselves from fraud.

NASAA surveyed its members, the state and provincial securities regulators throughout the United States, Canada and Mexico, to identify threats investors are likely to see in 2020.

Based on investor complaints, ongoing investigations and current enforcement trends, the securities regulators identified promissory notes, Ponzi schemes, real estate investments, cryptocurrency-related investments and social media/Internet-based investment schemes as the top five areas of concern for the coming year.

“It is important for investors to understand what they are investing in and who they are investing with. Don’t fall for promises of guaranteed high returns with little to no risk or deals pitched with a false sense of urgency or limited availability,” said Christopher W. Gerold, NASAA president and chief of the New Jersey Bureau of Securities.

Investment offers that sound “too good to be true” often share similar characteristics, NASAA said. The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk.

“Anyone who says their investment offer has no risk is lying,” Gerold added. “No one can guarantee an investment return.”

NASAA said that investors should always ask if the salesperson and the investment itself are properly licensed or registered, which can be confirmed by state and provincial securities regulators.

“For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products. Anyone offering to sell a security without a license is breaking the law and should be avoided,” said Gerold.

Formed in 1919, NASAA is the non-profit association of state, provincial, and territorial securities regulators in the United States, Canada and Mexico. NASAA has 67 members, including the securities regulators in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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